Identifier
Created
Classification
Origin
09RPODUBAI361
2009-08-31 12:42:00
CONFIDENTIAL//NOFORN
Iran RPO Dubai
Cable title:  

IRAN: THE POLITICS OF BREAD

Tags:  PGOV ECON IR 
pdf how-to read a cable
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PP RUEHBC RUEHDE RUEHKUK RUEHTRO
DE RUEHDIR #0361/01 2431242
ZNY CCCCC ZZH
P 311242Z AUG 09
FM RPO DUBAI
TO RUEHC/SECSTATE WASHDC PRIORITY 0505
INFO RUEKJCS/SECDEF WASHINGTON DC
RUEIDN/DNI WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
RUEAIIA/CIA WASHDC
RUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL
RUEHAD/AMEMBASSY ABU DHABI 0396
RUCNIRA/IRAN COLLECTIVE
RUEHDIR/RPO DUBAI 0506
C O N F I D E N T I A L SECTION 01 OF 02 RPO DUBAI 000361 

NOFORN
SIPDIS

E.O. 12958: DECL: 8/31/2019
TAGS: PGOV ECON IR
SUBJECT: IRAN: THE POLITICS OF BREAD

DUBAI 00000361 001.2 OF 002


CLASSIFIED BY: Alan Eyre, Director, Iran Regional Presence
Office, DOS.
REASON: 1.4 (b),(e)
C O N F I D E N T I A L SECTION 01 OF 02 RPO DUBAI 000361

NOFORN
SIPDIS

E.O. 12958: DECL: 8/31/2019
TAGS: PGOV ECON IR
SUBJECT: IRAN: THE POLITICS OF BREAD

DUBAI 00000361 001.2 OF 002


CLASSIFIED BY: Alan Eyre, Director, Iran Regional Presence
Office, DOS.
REASON: 1.4 (b),(e)

1. (C) Summary: Traditional flat breads are a staple of the
Iranian diet and offer a window into the problems of Iran's
economy. Iranians eat flat bread daily, particularly 'nan-e
sangak', and its importance has made bread prices a political
issue, particularly as prices have doubled since approximately
March of this year. In the past, rises in bread prices have
caused widespread unrest and even the occasional riots, most
notably in 1995. Bread prices are often a topic in state-run
news broadcasts and the IRIG controls prices both via a subsidy
for flour and by actively monitoring the price stores and
bakeries charge for their bread. The flour subsidy gives
bakeries-both larger, modern bread factories and the traditional
producers-flour at about 15 percent of the price for
store-bought flour. Subsidized prices also create a black market
for flour, which the IRIG fights with prison terms for those
caught illegally re-selling subsidized flour and also by closing
down some of the traditional producers, whose inconsistent daily
production is alleged to feed the black market. End Summary.




2. (C) IRPO recently spoke with a Tehrani bread factory owner,
who discussed bread preferences, prices, and the importance of
bread in Iran.



The Importance of Iran's Traditional Breads...




3. (C) Traditional flat breads have long been a staple of the
Iranian diet; there are several different versions, reflecting
regional differences and individual preferences. The baker we
spoke with said 'nan-e sangak' (a plain rectangular or
triangular whole wheat sour dough flatbread) is the most popular
bread and he compared its place in the national psyche to a
turkey's prominence at Thanksgiving. Nan-e sangak is eaten daily
for breakfast, often with cheese. The bread is cooked over a
pebble-based stove-'sang' means stone in Farsi-and comes in
three different versions: sadeh, khoskhashi, and zaffaron.
Sadeh, meaning simple, is the basic version and currently costs
5000 rials, about 50 cents - double from what it was six months
ago. Khoshkhashi includes some spices, was reputed to be the

preferred version according to the baker, and costs $1.00.
Zaffaron includes saffron and costs about $1.50. Nan-e sangak is
one of several traditional flat breads. Others include nan-e
barbari, which is popular in Iran's Azeri regions, nan-e toftun,
a cheaper bread variety similar to Indian nan, and nan-e lavash,
a very thin, simple flat bread.



...Makes its Price a Political Issue




4. (C) The price for bread is supposed to be the same throughout
Tehran and the IRIG will occasionally conduct price checks to
ensure correct pricing; in late August the IRIG announced it was
sending 600 officials to check bread prices throughout Tehran.
Bread quality and prices are occasionally mentioned in Friday
Prayers and often come up in state-run news broadcasts.




5. (C) The IRIG regulates the price bread via its flour
subsidies. Iranian farmers sell their flour to the government,
and the IRIG also imports flour to make up for shortfalls in
domestic production. The government then sells its flour at a
subsidized rate to bread manufacturers; the subsidized rate is
460 rials/kilogram (about 5 cents/kilogram). The rate available
in grocery stores is approximately 3000 rials/kilogram (about 30
cents/kilogram). According to the baker, the IRIG will increase
its price for flour quietly, as it did six months ago. The
bakers have no choice but to pass the price increase on to its
consumers, whereby the government blames the bakers for the
price increase and bakers blame the government.




6. (C) The price discrepancy between the subsidized and
unsubsidized flour fuels a black market for cheap flour. The
baker said being caught selling flour purchased from the
government at subsidized prices on the black market can yield
prison sentences of up to one year. He also said that the IRIG

DUBAI 00000361 002.2 OF 002


is trying shut down many of the small, more traditional bread
bakers. Although the IRIG publicly asserts the cleanliness of
these bakeries does not meet its standards, in reality, the
government is concerned that these bakers are selling their
excess flour on the black market. Whereas the larger bread
factories-such as that owned by our interlocutor-have consistent
bread demand and hence production each day, the smaller
bakeries' production varies from day to day, giving them fodder
for the black market.




7. (C) Comment: Iran's bread market shows the distorting effects
of subsidies and the corresponding rise in black market
activities. Although the Iranian government remains sensitive
to the political consequences of rising bread prices, its
seeking a solution in law enforcement vice market mechanisms
doesn't address the core problem, and the consequent rise in
this essential staple is one of the most palpable consequences
of Iran's mismanaged economy for the average citizen. End
comment.
EYRE